Question
Which of the following will have a greater effect on aggregate demand: a $1 billion tax cut or a $1 billion increase in government purchases?
Which of the following will have a greater effect on aggregate demand: a $1 billion tax cut or a $1 billion increase in government purchases?
A.A $1 billion tax cut will have a greater effect on aggregate demand.
B.A $1 billion increase in government purchases will have a greater effect on aggregate demand.
C.They will have the same effect.
Clearly explain your answer to part 1 of this question.
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Inflation, Unemployment And Capital Malformations
Authors: Bernard Schmitt, Xavier Bradley, Alvaro Cencini
1st Edition
0429767064, 9780429767067
